Sapient (SAPE) to be Acquired by Publicis Group

Shares of the Sapient Corporation (SAPE) were up +7.21 or +41.63 percent to $24.53 per share in Monday's premarket after the company announced early this morning that it will be taken over by the French advertising giant Publicis Groupe. Sapient Corporation stock closed at $17.32, up +0.47 or +2.79 percent in Friday's regular trading session.

Boston, Massachusetts based Sapient Corporation is a marketing and consulting company founded in 1990.
The company's primary business is providing top corporations with consulting and support services. The company is divided into three divisions that service the fields of retail, finances, energy, technology and government: Sapient Global Markets, SapientNitro and Sapient Government Services. Sapient had revenue of approximately $1.4 billion in the first half of 2013 and has offices in 37 cities employing over 13,000 people worldwide.

Paris, France based Publicis Groupe was founded in 1926 and along with WPP (WPPGY), Omnicom (OMC) and Interpublic (IPG) is one of the world's "Big Four" advertising and public relations companies. The company provides traditional and digital advertising, marketing and media services to its international clientele. In July of 2013, Publicis Groupe announced it was merging with Omnicom Group, nevertheless, the deal fell through in May of 2014 and the merger did not take place.

The deal for Sapient, announced early this morning will have Publicis pay $25 per Sapient share, a +44 percent premium over Friday's closing price. The deal works out to approximately $3.7 billion and will help Publicis Groupe compete with other digital advertisers such as Yahoo (YHOO), Facebook (FB) and Google (GOOG).

The merged company will create a joint platform called Publicis.Sapient that will focus "exclusively on digital transformation and the dynamics of an always-on world across marketing, omni-channel commerce, consulting and technology."

Alan J. Herrick, Sapient President, Chief Executive Officer and Co-Chairman, said that, "This transaction provides substantial value to our shareholders, offers an ideal cultural match for our people and provides an opportunity to share a wealth of new capabilities with our clients. The Sapient team has been on a 24-year journey building a company with the objective of creating significant impact for our clients and the industries in which they operate. With Publicis Groupe, we have found a partner that accelerates the level of transformation we can drive into the marketplace."

Chairman and Chief Executive Officer of Publicis Groupe, Maurice Lévy, said that, "Sapient is a â??crown jewel,' a one of a kind company born in the technology space with strengths in marketing, communications, consulting and omni-channel commerce, all of which are equally important to best help clients achieve their digital transformation. It will also give Publicis Groupe access to new markets and creating new revenue streams. This acquisition fulfills many of Publicis Groupe's objectives: we will enhance our leadership position in digital, achieve our goal of deriving 50% of our revenues from digital and technology three years ahead of our 2018 plan, and leverage technology, consulting capabilities to expand in new verticals, and offering new and exciting opportunities to our talents."

The deal has been unanimously approved by both company's boards and is expected to close by March of 2015 pending antitrust and other regulatory approval in the United States and antitrust clearance in Germany. The Publicis Sapient business will be led by Sapient's CEO Alan J. Herrick with Sapient's Co-Chairman, Jerry A. Greenberg added to Publicis' supervisory board.

Other News About Sapient
Sapient Global Markets Collaborates with Leading European Energy Firm Statkraft to Deliver New ETRM Platform in 9 Months
Company completes the Energy Trading and Risk Management (ETRM) project.
Sapient to Announce Third Quarter Financial Results on November 6
Company will announce third quarter earnings after the market close.

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Published on Nov 3, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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